For most car buyers, looking for a reliable bank to finance their auto purchase through a low interest loan plan should be the primary step. It is especially important for first time buyers to do their bit of research and then decide if their choice is the best option around. Of course the research is every bit hectic as one would expect- skimming through bank websites, trying to compare different schemes, making sense of all the technical jibber jabber and whatnot. We’ve compiled a list of the top 5 banks you can count on that provide the best auto loan offers and we hope that this makes your research a smidge easier.
The below listed banks are known for their reliability, customer service and different varieties of loan schemes; here’s an abridged version of all the auto loan schemes these banks have to offer.
1. State Bank of India
SBI is one of the first picks of the general Indian populace when it comes to anything ‘bank’- be it loans, savings or any other type of personal financing; and the best thing about this bank is that no one needs to vouch for its dependability. The auto loan offered by this bank is the ‘SBI New Car Loan Scheme’ under which, the repayment tenure is 7 years, bank finances up to 90% of the vehicle’s on-road price, requires no advance EMI and has an optional SBI Life Insurance cover.
SBI has low MCLR and rates of interest, and has made a special offer of 7.50% p.a. interest rate to customers who apply through YONO. If you’re a YONO user- Go avail that scheme!
The bank offers four types of car loans: At an interest rate of 7.75% – 8.45% come the SBI Car Loan, NRI Car Loan and Assured Car Loan Schemes.
The Loyalty Car Loan Scheme has the SBI/ NRI Car Loan and the Certified Pre-Owned Car Loan Scheme- that offers 7.70% – 8.40% for the former. The latter of the two offers 9.25% p.a. for men and 9.20% p.a. for women.
Another Certified Pre-owned Car Loan Scheme can be chosen for a rate ranging from 9.50% to 10.50%.
SBI Car Loan Lite comes with 10.20% p.a. for CIBIL score more than or equal to 757 and for a CIBIL score in the 689-756 range, the rate of interest is 11.20% p.a.
Your interest rate will be determined with the scheme that you are eligible for and the mean rate of 9.52% should give you a general idea of what to expect. SBI offers auto loans to everyone aged between 21 to 67 years with a processing fee ranging from INR 125 to INR 10,000 + GST.
2. ICICI Bank
With a loan that covers up to 100% of the vehicle’s on-road price over a max tenure of 84 months, ICICI is another major bank that offers exceptional lending agreements for new cars, pre-owned cars as well as loans against cars. The official bank website has made finding an ideal scheme extremely easy with an EMI Calculator that customers can use by setting variables like loan amount, interest rate and loan term. The minimum loan amount offered is INR 1 lakh with an interest rate that goes as low as 8.15% p.a. over the smallest tenure period available of 12 months. The website also gives a rough idea about the monthly EMI charges to be paid and the total interest amount accrued overtime.
ICICI’s Insta Top-Up can also be opted for as an additional loan on pre-existing car loans- the loan is given out instantly and comes with a 36 month repayment period. The bank also offers an online loan application method that interested borrowers can opt for. When applying for a loan, the applicants are divided into three types: salaried, self-employed professional and self-employed non-professional and you will have to keep documents like identity proof, bank statements, salary slips etc. on hand. In addition to loans, ICICI charges additional amounts for services like cash transaction for repayment of EMI dues and loan cancellations etc. which range from INR 100 to INR 650. Loan processing fees are based on price bands and may climb as high as INR 8,500 for new cars.
3. HDFC Bank
Offering Custom-fit Car Loans to all aspiring buyers, HDFC provides super quick loans to existing HDFC customers through the ZipDrive-Instant New Car Loan process. For new customers, the bank has a variety of new schemes under which they can opt for loan amounts as high as INR 3 crore. Basic queries like car loan eligibility and interest rates can be confirmed online through the ‘Ask Eva’ platform accessible through bank website. For New Car Loan, vehicle segment decides the rack interest rate which usually ends up falling between 8.80% and 10%. HDFC also boasts a very proactive loan application processing and a new car loan can get approved in as low as 10 minutes.
The bank asks for zero foreclosure charges and offers multiple schemes like Safe n Easy (for ‘salaried professionals’- EMI as low as 75% of other EMIs; and ‘all customers’- EMI equal to 70% of regular EMIs).
The 11119999 scheme only works for a period of 7 years and starts with very low EMIs, gradually increasing to an end-of-tenure payment of 10%; the Pay As You Grow- Step-up Scheme is a similar loan deal that is based on the conjecture that a person’s income grows with time.
Flexidrive allows customers to pay up to 50% less EMI for any three consecutive months in a year and the Premium Segment scheme is applicable for loans over 20 lakhs.
The bank charges an INR 700 non-refundable amount as documentation fee; and minimum and maximum processing fees of INR 5,000 and 10,000 respectively.
4. Axis Bank
The New Car Loan offered by Axis Bank accepts a minimum loan amount of INR 1 lakh for a maximum tenure of 7 years. Customers selecting this loan plan can also avail multiple Axis Bank exclusive offers like Edge Reward Points etc. EMI calculators on bank website make for easier determination of the approximate interest rates relevant for certain loan amounts. Individuals aged between 18 years at the start of loan to 70 years old at loan maturity are qualified for a car loan and fall under various eligibility categories prescribed by the bank. In addition to standard documents like application form, proforma invoice and KYC, candidates are also expected to prepare documents like office/ business proof, income proof etc.
The interest rates have been divided into two types- for loans with tenure up to 36 months and for tenure exceeding 36 months. The former comes with a one year MCLR (marginal cost of funds based lending rate) of 7.45% and Spread Over MCLR of 1.30% – 3.55%. The effective rates of interest for both are 8.75% – 11% with processing fees of INR 3,500- 5,500 and documentation charge of INR 500. The application process is incredibly smooth and you can apply for a loan in any of the three ways: online through the bank website, at any Axis Bank branch and by calling their Call Centre. The website also offers a comprehensive list of frequently asked questions and other details on availing a loan of choice. If you’re a customer going for priority banking, Privy Banking or Wealth Banking, you are also entitled to special benefits by the bank.
5. Punjab National Bank
PNB covers loans for new/ old four wheelers (car/ van/ jeep/ MUV/ SUV) and reimbursement of costs for vehicles purchased out of one’s own funds. The eligibility for a loan depends on private use by individuals, joint borrowers, and for business concerns. Additionally, parties with a minimum income of INR 25,000 per month will be considered qualified for the loan. The bank covers 15% of the on-road price for new cars, 25% of the value of old vehicle and 25% of on-road price for reimbursement cases. Repayment tenure for new vehicles is 84 months and for old/used cars is 60 months.
Borrowers involved in agricultural activities can pay at half yearly or yearly intervals that overlap with harvest time. The rates of interest vary according to CIC scores as well as under PNB Pride which offers Fixed Rate Option for All# at MCLR+0.95% for new car and MCLR+1.95% for old car. In addition to the standard car loan, the bank also has separate schemes for government employees, borrowers looking to avail a Combo Scheme of Housing loan plus Car loan and an Insta Vehicle Loan Scheme for existing home loan borrowers. Subject to some criteria, borrowers can also choose any one of the following for better interest rates and hassle-free loan approvals. Customers can apply for loans through PNB’s mobile app or through the official bank website.
Finding a trustworthy source of loan financing is tiresome but once you do find an option, all that’s left is choosing a plan and amount that suit your needs.
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